Why Domino’s pizza is costlier now; Jubilant responds after anti profiteering penalty

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Updated: February 5, 2019 5:12:26 PM

A day after NAA found Jubilant FoodWorks guilty of not passing GST benefit, the Dominos Pizza chain operator in India said the authority didn’t take into account the impact of input credit withdrawal while passing its order.

Jubilant FoodWorks Ltd (JFL), the owner of the popular eatery chains Domino's Pizza and Dunkin' Donuts, has reported a 60.24% rise in standalone net profitThe National Anti-Profiteering Authority on Monday fined the firm Rs 41.42 crore for not passing on the benefit of GST.

A day after NAA found Jubilant FoodWorks guilty of not passing GST benefit, the Domino’s Pizza chain operator in India said the authority didn’t take into account the impact of input credit withdrawal while passing its order. The National Anti-Profiteering Authority on Monday fined the firm Rs 41.42 crore for not passing on the benefit of GST cut to consumers and directed it to deposit the illegal gains with the government.

“In the absence of any explicit rules and guidelines, we followed the spirit of the law and passed on the benefits of GST reduction to our customers with immediate effect. We would like to assert that the loss to the company due to Input Credit withdrawal was far higher than the price increase that was taken, and this wasn’t taken into account by the NAA,” it said in a statement.

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The authority filed the order after a customer complained that the company didn’t reduce the prices of ‘Domino’s Stuffed Garlic Bread’ and ‘Medium Veg Pizza’ despite reduction in GST rate from 18 per cent to 5 per cent.

“It is clear that the Respondent has resorted to profiteering by charging more price than what he could have charged by issuing wrong tax invoices. He has further acted in conscious disregard of the obligation which was cast upon him by the law, by issuing incorrect invoices in which the base prices were deliberately enhanced more than what he was entitled to increase due to denial of ITC and thus he had denied the benefit of reduction in the rate of tax…,” the NAA said in the order.

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